Biosergen – Indian collaboration gives boost – Mangold Insight Analys

Biosergen will conduct a new phase 1b study in patients with invasive fungal infections with its drug candidate BSG005. This will be done together with the Indian pharmaceutical company Alkem. The benefits of doing clinical studies with Alkem are that Biosergen is guaranteed that future studies will be done and that the development costs for Biosergen will be significantly lower. This is a step done to get BSG005 faster to the market. However, Biosergen must finance the phase 1b study and needs to raise capital for that. Future studies are funded by Alkem.

Biosergen is expected to launch the phase 1b patient study in March. The duration of the study is expected to be short. Topline results are expected to be obtained in October 2024. This phase 1b study will confirm the safety of BSG005 and establish the dose for future studies. The need for new drugs for invasive fungal diseases is huge and there has been increased interest among pharmaceutical companies to include these projects in their portfolios. Mangold believes that Biosergen has a strong candidate which, following positive results from the phase 1b study in patients, should be able to attract a partner for a future global launch.

Mangold value Biosergen using a risk adjusted DCF model. The company’s substance is known, which reduces the risk and has so far proved safe in previous clinical studies. The risk in biotechnology equities remains high and should be considered. In our Base Case, a fair value of 3.30 SEK per share is given. Mangold has chosen to set price target to 3.00 SEK. Triggers constitute approval and initiation of the phase 1b study as well as its topline results this autumn.